﻿HEAL﻿ Bonds

Health Education Authority of Louisiana (HEAL) has the authority to issue bonds to primary institutions (LSU Health Sciences Center in New Orleans and Shreveport, Tulane University Health Sciences Center and other entities specifically listed in the legislation that created HEAL) and participating institutions (any state, local, nonprofit, or other group working in health care, health education, or biological sciences) to build, renovate, or expand facilities in the specified areas of New Orleans and Shreveport.

Moreover, HEAL has the authority to issue bonds in its name that are exempt from federal, state, and local tax, so bond recipients pay only for the land/property, with no additional costs associated with the issue. Only the property financing is tax free, bond recipients pay taxes on all aspects of the project for which the bond issue is intended. Bond recipients are not exempt from property taxes on their facilities. Organizations that receive HEAL bonds must prove they are able to pay debt service. Certain restrictions apply to the form of revenue organizations can use toward repayment and demonstrate financial sustainability.

HEAL bonds are issued in its own name;

HEAL bonds are not obligations of the state of Louisiana, but of HEAL;

WHAT KINDS OF FINANCING METHODS ARE AVAILABLE?Prospective borrowers might be eligible for public financing through a method of private placement or a pooled system. The type of financing will depend on the amount of capital involved and the specific needs of the borrowing organization. HEAL works with clients to help them determine the best financing method for their HEAL bond.

HOW ARE THE BONDS SECURED?Tax-free financing may involve a loan agreement or the more traditional lease procedure. The borrower may pledge revenues (in excess of the organization's operating costs) and other covenants to pay debt service on the bonds.

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